March 21, 2015
Record Breaking Number of Shareowner Resolutions in 2015
by Robert Kropp

The eleventh edition of As You Sow's Proxy Preview identifies 433 shareowner resolutions filed this
year, with corporate political activity and the environment accounting for slightly more than half
of them.

It's not just sustainable investors who should give thanks to As You Sow and the Interfaith Center
on Corporate Responsibility (ICCR) for the effort they put into their annual proxy previews,
which are available for download at no charge on the organizations' websites. Anyone with a
commitment to environmental and social justice, especially as viewed through the prism of corporate
social responsibility, gains essential insights by reading the two annual publications from such
experienced practitioners of corporate engagement.

That a record
setting 433 shareowner resolutions had been filed by February 17th of this year can be viewed as
indicating a more robust campaign of shareowner engagement, an increased awareness that
environmental, social, and corporate governance (ESG) issues are material in a financial sense.
Likewise, the increase can be seen as an acknowledgment among investors that corporations are
failing to address the several global crises that threaten the fabric of society as we have
experienced it thus far. (Even ICCR, whose members place a premium on dialogue, increased the
number of shareowner resolutions filed this year, from 193 in 2014 to 227.)

“This is a
systemic critique, pointing out how the board must accept responsibility for excessive political
spending, inadequate energy policy, our changing climate, toxic hazards, and human rights abuses,”
Andrew Behar, CEO of As You Sow, said.

As You Sow reports that slightly more than half the
resolutions filed thus far address environmental issues and corporate political activity. “Most of
the climate resolutions ask companies to reduce greenhouse gas emissions or to re-port on the risks
from climate change on business operations,” Passoff of Proxy Impact said. “Investors in fossil
fuel companies are especially concerned about how their businesses can succeed in a low-carbon
economy. There is growing alarm about the inevitability of stranded carbon assets and the potential
of a carbon bubble.”

The resolutions addressing political activity call for improved
transparency in political spending and lobbying, as well as “disclosure of money companies
contribute to intermediary groups responsible for the spiraling sums of money spent on US
elections.” The more than 50 resolutions addressing lobbying expenditures, John Keenan of AFSCME
Capital Strategies wrote in the report, allow investors to ensure that “lobbying is consistent with
a company’s expressed goals and being done in the best interests of the company and shareholders.”

“In 2014, the Chamber of Commerce spent $124 million to lobby, and it has spent over $1
billion on lobbying since 1998,” Keenan wrote. “Investors are asking companies to disclose all of
their payments to trade associations that these groups use to lobby.”

“A broad coalition
of investors wants companies to tell stockholders and the public more about so-called ‘dark money’
spent both in campaigns and on lobbying by groups that use corporate money and don’t say where it
comes from,” Welsh of Si2 said.

Human rights resolutions—on which ICCR members have been
particularly active—include calling for human rights risk assessments based on Professor John
Ruggie's Guiding Principles on
Business and Human Rights, which was endorsed by the UN Human Rights Council in 2011. Also, for
the first time, resolutions filed with three corporations request that they honor the Holy Land Principles, a corporate
code of conduct for US companies doing business in Israel/Palestine, The West Bank, The Gaza Strip
and East Jerusalem.

“The Holy Land Principles do not call for quotas, reverse
discrimination, divestment, disinvestment or boycotts,” Fr. Sean McManus wrote. “They only call on
American companies in the Holy Land to proudly declare and implement their American values.”

For researchers, one of the great pleasures of ICCR's annual proxy report is its inclusion of
the full text of every shareowner resolution filed by its members. In As You Sow's report, insight
can be enhanced by commentaries written by experts.

One such commentary, written by
shareowner advocate Nell Minow, reveals possible Securities and Exchange Commission (SEC)
violations by one of its sitting Commissioners, Daniel Gallagher. Referring to a draft article
co-authored by Gallagher which suggests that proposals drafted by Harvard Law School’s Shareholder
Rights Project may constitute a violation of SEC rules, Minow quotes Columbia law professor Robert
Jackson, who wrote, “It is wildly inappropriate for a sitting SEC commissioner to issue a law
review paper accusing a private party of violating federal securities law without any investigation
or due process of any kind. This is a striking, and as far as I know unprecedented, departure from
longstanding SEC practice.”

Another commentary, written by associates of the Impact of Equity Engagement (IE2), tells
of that initiative's efforts to “understand the nature of impact within public equities—where
investors’ engagement activities have generated meaningful social and environmental impacts.”

“Because most efforts to document the impact of engagement have been anecdotal rather than
analytical, a major objective of this initiative is to develop new, standardized ways to track and
report engagement activities, their outcomes and impacts,” Christi Electris and Becky Johnson
wrote.